A key investor in Fairfax Media said a report suggesting mining magnate
Gina Rinehart
is considering a takeover of the company sounded like “rampant speculation".

The report in News Corporation’s The Australian newspaper on Monday said Mrs Rinehart, who is the major shareholder in Fairfax, was “considering buying" the company if “she can find the right leaders to run it".

The report said Mrs Rinehart had approached “business associates" for suggestions on potential replacements for senior managers and directors should she decide to launch a takeover bid for the company.

“I think this is all rampant speculation if you ask me," said
Simon Marais
, managing director of
Allan Gray
, which owns 5.7 per cent of Fairfax. “She may have somebody look at it but that’s very far from actually taking it over."

The report said former ­Victorian premier
Jeff Kennett
declined an approach from Mrs ­Rinehart to become an alternative director of Fairfax, publisher of The Australian Financial Review, two years ago.

Mr Kennett told Fairfax Media he had no idea if Mrs Rinehart was ­planning a bid for the company. “I haven’t spoken to her for years," he said.

Mr Kennett said he had declined Mrs Rinehart’s offer two years ago to serve as an alternate director partly due to his relationship with News Corp (he is a columnist for the company’s Herald Sun newspaper). Fairfax declined to comment. Representatives for Mrs Rinehart’s private company,
Hancock Prospecting
, were contacted for comment. Hancock Prospecting owns just under 15 per cent of Fairfax Media. having first paid $50 million for 1.5 per cent of the company in late 2010.

Paul Xiradis
, managing director of
Ausbil Dexia
, which owns 6.4 per cent of Fairfax, said he did not know if a bid was on its way, but the company was “turning itself around and from our point of view, it’s still undervalued".

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This was due to a combination of cost-cutting, new revenue streams and its real estate classified business domain, he said.

The report referenced Mr Marais’s comments last week when he said the future of Fairfax was “uncertain" and cost-cutting would continue.

“That interview in The Australian was so far from what I really said," he told Fairfax Media last week. “They try to push you to say certain things. She (the journalist) was desperate for me to say the paper has been going backwards and
Roger Corbett
(Fairfax chairman) was doing a bad job, and I just didn’t want to go there because I don’t think that’s true." Fairfax shares closed up 1.65 per cent at 92.5¢.